My firm is hosting a seminar for business owners, in-house counsel, human resource professionals, and managers to learn about and how to implement best practices at the start of 2018. Plus, get to see the newly renovated Proud Bird and enjoy some light food and drinks during the mixer.

Our attorneys will be speaking about:

New case law developments facing California employers in 2018

Minimum wage increases on state local levels in Southern California and how to plan for the year

New hiring prohibitions – employers cannot ask about prior salary and new restrictions on conducting background checks, so what can employers still ask?

This white paper discusses some of misconceptions and myths about employee discipline, when severance pay and severance agreements should be used, and other end-of-employment considerations employers should consider.

Anther book not thought of as a traditional human resources book, but many of the lessons set out by Gary on how to market and build a successful business in today’s economy equally apply to human resources and managing a workforce. Being authentic and focusing on one-on-one interactions with people will always be a good practice, no matter how technical the workplace becomes.

Employers are strictly liable for the actions of its supervisors, managers or agents under the doctrine of respondeat superior. Here are five key concepts employers must understand about the liability that could be created by managerial employees.

The respondeat superior doctrine provides that “an employer may be held vicariously liable for torts committed by an employee within the scope of employment.” As explained by the California Supreme Court in Patterson v. Dominio’s Pizza, there are “three policy justifications for the respondeat superior doctrine…prevention, compensation and risk allocation.”

2. Employers liability for non-supervisory employees

Under California’s FEHA, the employer is strictly liable for harassing action of its supervisors. However, an employer is only liable for harassment by a coworker if the employer knew or should have known of the conduct and failed to take immediate corrective action.

3. Managers/supervisors under the respondeat superior doctrine

Under California’s FEHA, an employer is strictly liable for all acts of a supervisor. A supervisor is generally defined as someone who has the discretion and authority to hire, direct, transfer, promote, assign, reward, discipline, direct, or discharge other employees or to recommend these actions. See Government Code section 12926(t).

4. Which entities may be considered the employer under the respondeat superior doctrine

In terms of defining who is the employers, courts in FEHA cases have looked to “the control exercised by the employer over the employee’s performance of employment duties….This standard requires a ‘comprehensive and immediate level of `day-to-day’ authority’ over matters such as hiring, firing, direction, supervision, and discipline of the employee.” FEHA also defines employer to mean “any person action as an agent of an employer, directly or indirectly….” This means that people not directly employed by the company can still create agency liability for the employer.

5. Issue: Can a franchisor be held liable for a franchisee’s supervisor’s conduct?

How far does the doctrine of respondeat superior extend when there are levels of agency, such as in a franchisor-franchisee relationship? This was the issue addressed by the California Supreme Court in Patterson v. Domino’s Pizza. The Supreme Court held that given the facts in that case, Domino’s Pizza was not liable for the franchisee’s manager’s acts. The Supreme Court explained:

A major incentive is the franchisee’s right to hire the people who work for him, and to oversee their performance each day. A franchisor enters this arena, and becomes potentially liable for actions of the franchisee’s employees, only if it has retained or assumed a general right of control over factors such as hiring, direction, supervision, discipline, discharge, and relevant day-to-day aspects of the workplace behavior of the franchisee’s employees. Any other guiding principle would disrupt the franchise relationship.

The Supreme Court did not hold the franchisor liable in the case because it did not “control the workforce, and could not have prevented the misconduct and corrected its effects.” However, the Court issued a warning to franchisors:

A franchisor will be liable if it has retained or assumed the right of general control over the relevant day-to-day operations at its franchised locations that we have described, and cannot escape liability in such a case merely because it failed or declined to establish a policy with regard to that particular conduct.

California employers cannot forget about detailed employment provisions such as reporting time pay. This Friday’s Five provide a list of five things California employers should understand about reporting time pay:

1. What is reporting time pay?

California law requires an employer to pay “reporting time pay” under the applicable Wage Order. This requires that when an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee’s usual or scheduled day’s work, the employee shall be paid for half the usual or scheduled day’s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee’s regular rate of pay, which cannot not be less than the minimum wage.

In addition, if an employee is required to report to work a second time in any one workday and is furnished less than two hours of work on the second reporting, he or she must be paid for two hours at his or her regular rate of pay.

California’s Labor Commissioner provides the following example:

For example, if an employee is scheduled to report to work for an eight-hour shift and only works for one hour, the employer is nonetheless obligated to pay the employee four hours of pay at his or her regular rate of pay (one for the hour worked, and three as reporting time pay). Only the one-hour actually worked, however, counts as actual hours worked.

Employers must remember, when an employee is scheduled to work, the minimum two-hour pay requirement applies only if the employee is furnished work for less than half the scheduled time.

2. Time paid as reporting time pay does not trigger overtime pay.

Reporting time pay for hours in excess of the actual hours worked is not counted as hours worked for purposes of determining overtime.

3. Reporting time pay and meetings.

There has been significant litigation over reporting time pay that is owed when employees are called in for meetings. If an employee is called in on a day in which he is not scheduled, the employee is entitled to at least two hours of pay, and potentially up to four hours if the employee normally works 8 hours or more per day. See Price v. Starbucks.

The Wage Orders provide that employers are not required to pay overtime pay during the following circumstances:

When operations cannot begin or continue due to threats to employees or property, or when civil authorities recommend that work not begin or continue; or

When public utilities fail to supply electricity, water, or gas, or there is a failure in the public utilities, or sewer system; or

When the interruption of work is caused by an Act of God or other cause not within the employer’s control, for example, an earthquake.

5. What if the employee voluntarily leaves early?

Employers are not required to pay reporting time pay if the employee voluntarily leaves work early. For example, if the employee becomes sick or must attend to personal issues outside of work and leaves early, then the employer is not obligated to pay reporting time pay.

Having just attended the Advanced Mediation Conference hosted by the State Bar of California Labor and Employment Law Section, it occurred to me how intimidating a mediation can be for even sophisticated business operators. I wanted to share five concepts brought up at the conference that I would like all of my clients to understand about the mediation process:

1. The mediator’s role – making you uncomfortable (but in a good way).

As I wrote in a prior post, a mediator’s only role is to get the case settled. He or she is not there to be your friend, not to tell you what they feel the case is worth, or to protect your opponent’s position. Their role is to get a settlement. Put yourself in the mediator’s shoes, and you have two warring parties who hate each other and believe they will win if their case goes to trial. How, as a mediator, do you get the parties to move off their respective beliefs? You must attack both sides’ theory of the case by pointing out the weaknesses of each sides’ positions. So don’t take the attacks personally, or think that the mediator is only attacking your position. If the mediator is persuasive about how weak your case is, she is equally persuasive to other side. Follow the Navy SEALs’ saying “Get comfortable being uncomfortable.” Understand also, that the attacks are not personal, it is not about you as a person, but instead about the facts of the case and weaknesses of the case. Finally, remember that the more uncomfortable you are, the opposing party in the other room is likewise feeling the same way.

2. Understand when being cooperative will help you get a better deal.

A party involved in a mediation must understand that there are two parts to a mediation: (1) the process and (2) the content. The process is how you interact with the other party being negotiating against. Are you cordial? Do you make small talk? The content is the subject being negotiated, such as the dollar amounts. A party that is cooperative about the process and competitive about the content will do better overall in a mediation than compared to a party that is competitive on both the process and content. Think about how you interact with someone that is simply being a jerk to you on ever little issue, even issues that do not impact the subject being negotiated. When dealing with the hyper-competitive negotiator, your guard goes up and the negotiation turns more personal. This is a bad combination for attempting to reach a reasonable settlement.

3. If you make a last, best and final offer, make it your last best and final offer.

Parties’ statements made during a mediation must have credibility. If you make a “last, best and final offer” during a mediation, and the other side rejects the offer, but you continue to negotiate, you have lost credibility with the other party and the mediator. As a result, even if you continue to negotiate and truly reach your last, best and final offer, the other side (and the mediator) will not believe that is your final number and will continue to push you beyond this number. There are occasions to make a last, best and final offer, but if you qualify your offer as such, be ready to walk out of the mediation if the offer is rejected.

Negotiation “bracketing” is the process of making a conditional offer linked to an expected response from the other side. For example, plaintiff states, “I will demand $500,000 if the defendant offers $200,000.” Defendant responds by accepting the bracket or proposing a different bracket (Defendant will offer $100,000 if plaintiff demands $400,000) or offering an absolute number. Plaintiff then replies with one of the same three options. Using negotiation “bracketing,” the parties send clear signals about their expectations, save time and avoid the stress of the negotiating dance that starts with a $1 million demand and a $10,000 offer.

In addition, brackets are conditional offers. Therefore, unless the other side accepts the proposed bracket, the party making the offer is not committed to those numbers. This allows parties to potentially make larger moves without the fear of having those moves held against them later in the mediation or in the case.

The use of bracketing during negotiations can add another layer of complexity to the settlement negotiations. However, with advice from counsel about how to negotiate using brackets, they are an effective tool in resolving cases. Understanding the concept of bracketing before a mediation – even at a very basic level – will help save time during a mediation and allow you keep your focus on the negotiation.

5. Enter the mediation prepared with a bottom walk-away number, but also a number that represents a goal.

Experienced negotiators will set not only the walkaway numbers beyond which they will not move, but also goals that are better than those walkaway numbers. Parties who set “shoot for” numbers as their reference points typically do better than those who only formulate walkaway numbers.

I hope everyone is having a great Thanksgiving weekend. This Friday’s Five is about five common questions I’m receiving from California employers at the close of 2016.

1. Does the legalization of recreational use of marijuana in California with the passage of proposition 64 change employer’s rights to prohibit it in the workplace?

No. Proposition 64 expressly provides that employers may prohibit marijuana in the workplace, and will not be required to accommodate an employee’s use of marijuana. This is also consistent with the California Supreme Court’s holding in Ross v. Ragingwire Telecommunications, Inc. In that case the court examined the conflict between California’s Compassionate Use Act, (which gives a person who uses marijuana for medical purposes on a physician’s recommendation a defense to certain state criminal charges and permission to possess the drug) and Federal law (which prohibits the drug’s possession, even by medical users). The court held that the Compassionate Use Act did not intend to address the rights and obligation of employers and employees, and further noted that the possession and use of marijuana could not be a protected activity because it is still illegal under federal law.

Employers must begin using the new Form I-9 by January 22, 2017. It is important to note that employees already hired with the older version of the Form I-9 do not have to complete the new version. More information about the revised Form I-9 can be read here.

4. What new laws in California do employers need to understand for 2017?

New laws that will impact many California employers include:

Prohibition on asking or taking into consideration juvenile convictions when hiring

Expansion of wage discrimination laws based on gender, race or ethnicity.

Employers with 25 or more employees are required to provide written notice to employees about rights provided to domestic violence victims under California law.

Employers are prohibited from requiring employees who primarily reside and work in California to agree to adjudicate claims outside of California or apply another state’s laws in arbitration agreements.

Join me on December 13, at 11:00 a.m. Pacific time for a webinar: “Employment law update: Essential issues facing California employers in 2017.” (I had to throw this self-promoting question in the line-up.) You can register for the webinar here.

The USCIS hosted a teleconference today that explained some of the updates to the form. During the teleconference, the following issues were addressed:

The USCIS explained that P.O. Boxes are no longer expressly prohibited in section 1 information about the employee. However, employers cannot use a P.O. Box for their addresses in section 2 of the form.

The new form is only required for new hires or for re-verifying employee’s information. It is not required for current employees who completed the old Form I-9 to complete the revised Form I-9.

On the teleconference there were a number of questions about the application of e-signatures when completing the I-9. During the teleconference, the USCIS deferred answering any specific questions about e-signature options. However, the Handbook for Employers provides the following:

If you complete Forms I-9 electronically using an electronic signature, your system for capturing electronic signatures must allow signatories to acknowledge that they read the attestation and attach the electronic signature to an electronically completed Form I-9. The system must also:

1. Affix the electronic signature at the time of the transaction;

2. Create and preserve a record verifying the identity of the person producing the signature; and

3. Upon request of the employee, provide a printed confirmation of the transaction to the person providing the signature.

Employers who complete Forms I-9 electronically must attest to the required information in Section 2 of Form I-9.

During the teleconference, it was stressed by USCIS that electronic signatures are acceptable given that the software complies with the USCIS regulations.

Do employers have to provide the instructions to the employee when presented the Form I-9? When on the computer, provide them with internet access so that they can click on the top of the page so that they can review the instructions. If there is no internet access, you have to provide the instructions to the employee – print or download the instructions for the employee to read the 15 pages of instructions.

Finally, a note of caution for employers who retain copies of Form I-9 documentation. The Handbook for Employers provides that if an employer chooses to retain copies of an employee’s documents, the employer must do so for all employees, regardless of national origin or citizenship status. Failure to keep records for all employees could be in violation of anti-discrimination laws.

What a week – and here we are at Friday already. This Friday’s Five focuses on how President Trump could change the employment landscape on the federal and California levels.

1. Department of Labor’s overtime regulations effective December 1, 2016 are still on course to take effect, but could be changed in 2017.

As I’ve written about previously, the DOL has issued changes to the federal rules raising the salary required for employees to qualify as exempt employees. The DOL raised the salary required to $47,476 annually for a full time worker, and this change is effective December 1, 2016. Mr. Trump will obviously be unable to roll back this increase until he is inaugurated as president. However, there have been discussions that congress and some legal actions could prevent this requirement from taking effect, but prudent employers should continue to proceed to comply with the new requirement on December 1, 2016. It is likely that this regulation will be carefully reviewed by President Trump, but any changes he potentially could make would likely not be effective until mid or late 2017.

2. Immigration and E-verify issues.

During the campaign, Trump stated that he would mandate employers use the E-verify program to check on applicants’ right to work within the United States. The system is available for employers to use currently, but Federal law does not require employers to use the system, and some states require its use. However, employers in California are not currently required to use E-verify.

3. Minimum wage.

During the campaign, Mr. Trump supported the idea of raising the federal minimum wage from $7.25 per hour to $10 per hour. In July of 2016, Mr. Trump made statements that he supported this increase, and also supported the idea that states could set a higher minimum wage. Of course, given California’s current minimum wage is set at $10 per hour, an increase on the federal level will probably not impact California employers, as California’s minimum wage is increasing to $10.50 per hour on January 1, 2017, $11 per hour on January 1, 2018, and then $1 per year thereafter until it reaches $15 per hour in January 2022. These increased are delayed by one year for employers with 25 or fewer employees.

Interested in learning more about employment law updates facing California employers? My firm is hosting a webinar on December 13, 2016, discussing the new laws employers must comply with in 2017 and an update on the litigation front. Click here to register.